OFFICE MEMORANDUM
F.N0.12/11/2016-JCA2
Change of date of holiday on account of Id-ul-Zuha (Bakrid) during 2016 for all Central Government administrative offices located at Delhi/New Delhi
CASE LAWS
2016-TIOL-157-SC-IT
UOI Vs CENTRAL INDIA INSTITUTE OF MEDICAL SCIENCES: SUPREME COURT OF INDIA (Dated: September 2, 2016)
Income Tax - Section 35(1)(ii).
Keywords - Competent Authority - Research association.
Whether when the Union Finance Minister is the competent authority to grant approval u/s 35(1)(ii) and the decision taken by him is generally communicated to the assessee by the DIT, any communication relating to refusal to extend approval can be presumed to be a decision not taken by the competenent authority - NO: Supreme Court
The assessee is a registered Society, and a Public Charitable Trust. The assessee carried on research activities and also hospital activities on the donations received. It was registered for Sec 80G benefits. The assessee sought renewal of the approval in terms of Section 35[1][ii] of the Act, which Revenue rejected on certain grounds. Assessee preferred a petition before the HC, which set aside the order of refusal of extension of approval u/s 35(1)(ii) on the ground that the decision was taken by the DIT and not by the competent authority i.e. the Finance Minister.
On appeal, the Apex Court held that,
++ we have perused the order dated 22.10.2010 refusing to renew the approval for the period 01.04.2008 onwards. From the said order it is evident that the initial grant of approval was ordered by the Minister but the same was conveyed by the Director. The order dated 22.10.2010, recites that the decision not to extend the approval was approved by the prescribed authority. It has been averred by the Revenue that under Rule 3, Govt. of India (Transaction of Business) Rules, 1961 such decisions are required to go to the CBDT and thereafter to the Minister which requirement was complied with in the present case;
++ in view of the aforesaid averments, which remained uncontroverted, we are of the view the High Court was not justified in striking down/refusing the extension of the approval granted on the ground that the same has been passed by the DIT, who is not competent to do so. Accordingly, we set aside the order of the High Court and allow this appeal.
Revenue's appeal allowed
2016-TIOL-2036-HC-DEL-ST
EMAAR MGF CONSTRUCTION PVT LTD Vs CST: DELHI HIGH COURT (Dated: August 30, 2016)
ST - As against the demand of Service Tax of Rs.130 crores, CESTAT ordering pre-deposit of Rs.30 crores for granting stay - appeal to High Court contending that based on the nature of the contract, service tax per se is not leviable; that the law w.e.f 06.08.2014 mandates that pre-deposit should not exceed seven and a half per cent of the tax demand. Held: Having regard to the totality of circumstances, appellant should deposit an amount equal to 7½ % of the total demand within three months - upon compliance, appellant should be heard by CESTAT and case to be disposed of on merits - Order of CESTAT modified: High Court [para 3]
Appeal disposed of
2016-TIOL-2035-HC-DEL-CX
CENTRAL PRESS PVT LTD Vs UoI: DELHI HIGH COURT (Dated: August 31, 2016)
CX - Classification of text books and printed work text books for use in Sarv Shiksha Abhiyan as a basic tool for education widely used by the students and the teaching community alike – Petitioner submitting that Kanpur Commissionerate proceeding on the footing that said Work books are classifiable as Exercise books under Chapter 4820 of CETA, 1985 – Petitioner relying upon the representation by the All India Federation of Master Printers which states that all Commissionerates have not adopted the classification at SH4820 and that the widely prevalent trend is not to pay excise duty on these products because of the understanding that they are classifiable under Chapter 49 [Products of the printing industry]. Held: Matter assumes some criticality and importance having regard to the use of the work books i.e., education - In case the classification of these articles is in SH4820, the manufacturers/printers would have to pay duty which would be collected ultimately from the consumers, i.e., the students - CBEC is, therefore, directed to consider all aspects of the matter - petitioner shall furnish relevant details and particulars including a sample or samples of the work book/product in question within two weeks and CBEC shall thereafter examine the matter and pass appropriate order u/s 37B of the CEA, 1944 at its earliest – Petition disposed of: High Court [para 4, 5]
Petition disposed of
2016-TIOL-2034-HC-KOL-CUS
DCC Vs KANJI SHAVJI PAREKH CALCUTTA PVT LTD: CALCUTTA HIGH COURT (Dated: September 01, 2016)
Cus - Commissioner has allowed the appeal preferred by the writ petitioner, therefore, revenue is liable to carry out that order - Writ Court has directed the revenue to make such payment - It is clarified that such payment to be made by the revenue shall be subject to result of the appeal pending before the Tribunal – direction imposed by writ court to pay costs is set aside: High Court [para 5]
Appeal disposed of
2016-TIOL-2033-HC-DEL-CUS
VISHAL VIDEO AND APPLIANCES PVT LTD Vs UoI: DELHI HIGH COURT (Dated: September 05, 2016)
Cus - Refund of CVD - Claim rejected on the short ground that the department was contemplating an appeal by way of special leave in regard to an order in Micromax Informatics Ltd. - 2016-TIOL-978-HC-DEL-CUS and a review of the law declared by the Supreme Court in M/s. SRF Industries Ltd. - 2015-TIOL-74-SC-CUS adjudication officer, who rejected the petitioner's claim for refund has adopted the same approach that she did which became the subject matter of scrutiny in several previous orders commencing from Micromax (supra) and which issue was revisited in Yu Televentures - 2016-TIOL-1641-HC-DEL-CUS holding that mere fact that the Department was contemplating or in fact filed a review petition or an appeal against an order of the High Court or the Supreme Court that was 'unacceptable' to the Department cannot be a valid justification for not complying with or implementing the order - respondent Revenue raising new ground which was not the basis for rejection of refund - ground rejected - petitioner's refund claim is, therefore, allowed - Respondents are directed to pay to the petitioner within three weeks, the claimed amount together with interest due thereon upto the date of refund: High Court [para 4, 6, 7]
Petition allowed
2016-TIOL-2032-HC-DEL-SERVICE + Story
ARBIND MODI Vs UOI : DELHI HIGH COURT (Dated: August 30, 2016)
Service Matter - Promotion - DPC - HAG Grade.
Whether DPC held as per the extant IRS Rules, 1988 and also DoP&T OM, just before the cabinet approval of Cadre Review stands valid and Review DPC to demote the promoted officers as per new restructuring plan is legally not sustainable - YES: HC
Whether petitioners can be treated as promoted as CCITs even as they would draw pay of a grade lower - YES: HC
The petitioners are the members of Indian Revenue Service of 1981 Batch and presently posted as Chief Commissioners of Income Tax or in the equivalent Grade of Director General of Income Tax. The petitioners were promoted from the post of Commissioner of Income Tax/Director of Income Tax to the post of Chief Commissioner of Income Tax/Director General of Income Tax for filling up 35 posts pertaining to the vacancy year 2013-2014, based on a delayed DPC held on 17.9.2013. Thereafter the respondents issued order dated 28.8.2014 directing holding of review DPC with respect to the original DPC held on 17.9.2013. The respondents also issued order dated 20.1.2015 for holding a review DPC to consider the officers who stood promoted as Chief Commissioners to the newly created lower post of Principal Commissioners of Income Tax. The petitioners thereafter filed their individual representations. Since the petitioners did not receive any response from the respondents, they moved the Tribunal.
As per the respondents, the reasons for passing the orders dated 28.8.2014 and 20.1.2015 were on account of restructuring of the Cadre which took place on 23.5.2013, as per which the petitioners could only be promoted to the post of Principal Commissioner of Income Tax in the pay grade of HAG. This restructuring of the cadre could not be brought to the notice of DPC as also ACC.
On 28.8.2015, the senior counsel for petitioners, had contended before the HC that the prime ground of challenge by the petitioners before the Tribunal was that the effect of the review DPC would be that the petitioners, who already stood promoted as Chief Commissioners pursuant to the DPC held on 17.9.2013 would be demoted and relegated to the newly created posts, known as Principal Commissioners of Income Tax (PCIT). It was further submitted that the post of Principal Commissioners of Income Tax (PCIT) had been created on account of cadre restructuring. It was contended that the stand of the respondent that cadre restructuring could not be brought to the notice of DPC and ACC was disputed on account of the fact that the Revenue Secretary had participated in the DPC and, thus, it could not be said that the respondents were not aware of restructuring which was being carried out by the respondents. Another submission, which was made before the Court, was that all the petitioners were eligible for the post of Chief Commissioners as on 1.1.2013. A right had accrued in their favour on the said date, which was prior to restructuring and prior to framing of Rules, which were framed after the DPC was conducted on 29.4.2015.
The Additional Solicitor General urged the bench that since the DPC was held without taking into consideration the restructuring of the cadre, no right would flow in favour of the petitioners. It was further submitted that the effect of the cadre restructuring was that the next promotion to the post of Chief Commissioner would be Principal Commissioner of Income Tax, a post created by the respondents between the Commissioner and the Chief Commissioner.
The stand of the petitioners was that since the new Rules came into effect post the DPC, the petitioners should not be deprived of the promotion granted to them based on the DPC held on 17.9.2013. It was further the stand of the petitioners that the effect of the cadre restructuring would be that the post of Commissioners was upgraded to the next higher grade, which was introduced as Principal Commissioners of Income Tax with the pay scale of Rs.67,000 – Rs.79,000. The grievance of the petitioners was thus, in case a review DPC was conducted, the petitioners would be relegated back from the post of Chief Commissioners (HAG+) to the Principal Commissioners of Income Tax (PCIT with HAG Scale).
The counsels for the parties handed over in Court the Minutes of the meeting held on 13.1.2016 between the Additional Solicitor General and the counsel appearing for the petitioners to lend clarity to the proposal for settlement
Having considered the terms of settlement, the HC held that,
++ In our view, the ends of justice would be met with the following directions:
i. The DPC held on 17.9.2013 for promotion from Commissioner to Chief Commissioners is in accordance with the extant Indian Revenue Service Rules, 1988, read with relevant DoP&T instructions contained in OM No.2201/5/86-Estt.(D) dated 10.4.1989. Therefore, the said DPC is legally valid and the proposal of the Government to hold a review DPC to demote the petitioners from Chief Commissioner to the new posts of Principal Commissioners is illegal and accordingly quashed;
ii. The petitioners will be treated as promoted to the posts of Chief Commissioners of Income Tax as per the orders dated 16.12.2013, 20.2.2014 and 4.6.2014. However, they will draw pay and allowances in the HAG grade for one year from the date of their respective promotions;
iii. On completion of one year in the HAG grade, they will be placed in the higher HAG plus scale without any fresh DPC but subject to Vigilance clearance.
iv. The residency period for promotion to Principal Chief Commissioner of Income Tax shall be counted from the date on which the petitioners are placed in the HAG plus grade;
v. The respondents will take immediate steps to promote the petitioners to the posts of Principal Chief Commissioner of Income Tax in accordance with extant rules.
Partially allowed
2016-TIOL-1620-ITAT-DEL
ADIT Vs BUMI HIWAY M SDN BHD: DELHI ITAT ( Dated: September 5, 2016)
Income Tax Act 1961 - Set off - Tax effect
Whether amount of loss determined does not have any tax effect, if no set off of loss determined is claimed by the assessee in the subsequent years and the time limit for carry forward or set off of loss has expired - YES: ITAT
The assessee is a company. The assessee filed its return in the relevant AY's. During the assessment proceedings the AO made adhoc disallowance of 5% out of material consumed and rejected the book of the account of the assessee. Aggrieved by the order of the AO the assessee preferred an appeal before the CIT(A) who ruled partly in the favour of the revenue. Hence, the Revenue, aggrieved by relief allowed filed appeal before Tribunal. Assessee also filed cross appeal.
Having heard the parties, the Tribunal held that,
++ once no set off of loss determined in assessment year 2004-05 is claimed by the assessee in the subsequent year, and the time limit for carry forward or set off of loss has expired, in our opinion, the amount of loss determined does not have any tax effect so far as the assessee or the Revenue is concerned. We, therefore, hold that Revenue's appeal has effectively nil tax effect. Therefore, the CBDT Circular No. 21/2015 dated 10th December, 2015 is squarely applicable. Counsel for the assessee was also fair enough to say that the assessee's cross-objection should also be treated as of academic nature because the quantum of loss determined will have no consequence to the assessee also. In view of the above, we deem it proper to dismiss the Revenue's appeal as well as assessee's cross objection being of academic nature only.
Revenue's appeal dismissed
